11-39 The risk premium,or spread,between corporate bonds and Treasury securities tends to increase as the time to maturity increases.

Question

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This statement is generally true. The risk premium or spread is the additional yield that investors demand to compensate for the additional risk of investing in corporate bonds compared to risk-free Treasury securities. As the time to maturity increases, the uncertainty and risk associated with the future cash flows of corporate bonds also increase, leading to a higher risk premium. However, there may be instances when the risk premium decreases as the time to maturity increases due to other factors such as changes in market conditions or the creditworthiness of the issuer.

11-39 the Risk Premium,or Spread,between Corporate Bonds and Treasury Securities